Great Panther Reports On Production At Its Mexican Silver Operations
VANCOUVER - Great Panther Silver reports second quarter ("Q2") production at its two wholly-owned Mexican silver mining operations, Topia and Guanajuato.
Metal production from the two mines, at 562,944 silver equivalent ounces ("Ag eq oz"), including 386,209 ounces silver, 1,931 ounces gold, 266 tonnes lead, and 348 tonnes zinc, is within 2% of production for the second quarter 2010. Plant throughput is up by an average of 30% compared to Q2 2010, however, ore grades were lower than anticipated. Record quarterly metal production of 212,108 Ag eq oz was achieved at Topia, including record silver production of 143,774 silver ounces ("Ag oz").
For the year to date, the combined metal production, at 1.17 million Ag eq oz, is up 6% from a year ago and the production rate is expected to increase further in the second half of the year.
Great Panther Silver continues to work towards achieving the goals of its 3-year (2010-12) growth strategy for its two operations. Key to the success of the growth strategy is the delineation of new NI 43-101 compliant Mineral Resources, and drilling is being accelerated in 2011 to achieve these goals for 2012. Also, the addition of new production areas, from the increased development in the first two quarters, and better grade control are anticipated to lead to increased mine output and higher grades in the second half of 2011.
New NI 43-101 compliant Mineral Resource estimates by RPA have been published for both operations. Resources for Topia support current and future mine expansions and the plant capacity has been increased to 275 tpd. Resource estimates for Guanajuato support medium term production goals and plant capacity has already exceeded what is required to achieve these. The published resources did not include estimates for the Guanajuatito area and the San Ignacio Property. The NI 43-101 Mineral Resource estimates for San Ignacio and Guanajuatito are being prepared for release later this year while the resources for other areas of Guanajuato will be updated as new drilling data has been interpreted.
Due to delays in shipments of concentrate from its Guanajuato mine, inventories at quarter end were higher than normal and the Company advises that second quarter revenue will be lower than anticipated. However, once these sales are realized, revenue will be positively affected in coming quarters.
The Company sells its concentrates for both the Topia and Guanajuato mines through contracts with third party metal traders. During the second quarter, the principal trader, who is contractually obligated to take agreed upon concentrate volumes from Guanajuato, initially advised the Company that there would be delays in fulfilling their contractual obligations until later in the quarter, at which time they would catch up and clear the backlog. Towards the end of the quarter, they advised that the delays would persist due to conditions at the smelter. The sale of concentrates from the Topia mine have been unaffected by this issue as these are sold to a different trader. The Company has also been working directly with other metal traders and smelters to negotiate new contracts and expects that any such new arrangements, together with the existing contract, will allow the Company to sell the concentrate inventory on hand at Guanajuato through the balance of the year. Some smelters have sharply increased their refining charges in response to higher precious metal prices but the Company has decided to stockpile the concentrate rather than sell it under these onerous conditions. "We have been working hard to ensure the continuous delivery of our Guanajuato concentrates through this period and see this as a short-term issue which will be resolved over the next two quarters," said Robert Archer, President and CEO. "While our quarterly revenue might be a bit bumpy until things smooth out, we have a strong cash position to weather this issue and have not altered our plans to increase production."